Medvedev eyes German help for Russia

July 15, 2010

, YEKATERINBURG, Jul 15 – President Dmitry Medvedev Thursday called on German firms to help Russia modernise its economy as Germany inked multibillion euro deals to further cement the Moscow-Berlin partnership.

At a summit between Medvedev and German Chancellor Angela Merkel in the Urals city of Yekaterinburg, German engineering giant Siemens signed deals worth several billion euros to supply trains and wind turbines to Russia.

"I very much expect that German firms, which have huge experience in this area, will take part in this (modernisation) work," Medvedev told business leaders.

"Taking into account the strategic partnership in the economic sphere I believe the prospects here are not too bad," Medvedev said, during what is his fifth meeting with Merkel this year.

Germany is Russia\’s main economic partner and enjoys close diplomatic relations with Moscow.

Medvedev also invited German business people to invest in companies which had until recently been off limits to foreigners.

"I expect that German companies will take part in the modernisation of companies they are interested in, also taking into account my decision to reduce the number of strategic enterprises," Medvedev said.

Last month, Medvedev announced he was cutting fivefold the number of firms deemed "strategic" and in which the state is obliged to own a stake, opening the way for broader participation of foreign companies in the economy.

Medvedev also said the Russian government had earmarked 170 billion rubles (5.5 billion dollars) for the establishment of the Skolkovo high-tech hub outside Moscow — Russia\’s answer to Silicon Valley.

Under the memorandums of understanding signed with Russia, Siemens is to modernise 22 Russian railway switching yards by 2026 and supply Russian Railways (RZhD) with 240 regional trains over the next ten years, it said in a statement.

Siemens is also to install wind turbines with a total capacity of up to 1,250 megawatts in Russia by 2015, it added.

The deals have a total value of "several billion euros" (dollars), Siemens said, without giving further financial details.

German government sources have reportedly said the railway deal alone is worth 2.2-billion-euro (2.8-billion-dollar).

Siemens chief executive Peter Loescher also signed an agreement making the German firm a partner in the Skolkovo project.

Medvedev this week told Russian diplomats that one of their top tasks was to help businesses forge economic alliances with the West and Germany in particular as the Kremlin seeks to wean the country off oil and gas exports as its main economic motor.

Merkel for her part expressed hope that Russia will join the World Trade Organization in the near future and that its fledgling customs union with neighbours Kazakhstan and Belarus would not hinder its WTO talks.

Russia, which opened negotiations to join the WTO in 1993, is the largest economy that is still outside the Geneva-based body.

Russian officials have repeatedly expressed frustration with the process for accession to the WTO and floated a plan to enter the global trade body as part of a customs bloc with Belarus and Kazakhstan that was formally launched earlier this month.

Medvedev assured Merkel that the customs bloc would not stand in the way of the WTO talks, noting progress in Russia\’s negotiations with the United States.

"I hope that the most significant progress in this respect will be made this year," he added.

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